Legislature OKs lower subsidies for green energy

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It isn't known whether Gov. Ted Kulongoski will sign the bill. An aide said he doesn't want to roll back Oregon's incentives for alternative energy because they bring economic returns but that he knows Oregon needs all the money it can get.

The bill also adds incentives for electric car and innovative battery manufacturers.

"He's weighing his options very carefully," said Anna Richter Taylor, spokeswoman for the governor.

The Senate approved HB2472 by a vote of 26-2 vote. It lowers the maximum state payments to large wind projects from $10 million to $3.5 million.

At issue is Oregon's Business Energy Tax Credit, a once minor subsidy program aimed at boosting conservation efforts. Two years ago the Legislature expanded the program, offering millions of dollars to wind and solar companies to bring their projects and jobs to Oregon.

The changes allowed a business to recoup up to half the cost of building a new plant that either generates renewable power or makes equipment for renewable power generation.

The subsidies were the most generous in the nation and have been credited with bringing a number of wind and solar projects to Oregon.

But state spending on the projects passed $60 million over the past two years and was expected to approach $150 million in the coming two years.

An investigation by The Oregonian showed that millions of dollars in credits went to some risky startup companies, to projects with questionable environmental benefits and to projects that would have been built anyway.

The new rules would require a company to stay in continuous operation for five years or risk losing its credit.